You wouldn’t buy a suit, dress or pair of shoes that didn’t fit right, would you? When it comes to buying insurance for your car, truck or SUV, it makes even more sense to get just the right fit. Here are 10 steps to help you choose your next auto insurance provider.

  1. Know what you need – If you currently have an insured vehicle, and plan on replacing it with a like vehicle, you already have an idea of what you may need. Type of vehicle — car, truck, SUV; brand, fuel economy, vehicle size, engine size, luxury, economy, hybrid, alternate fuel, etc., are some of the considerations. Suppose you are moving up (or down) in various classifications. You may need to do some research on the additional types of coverage you may want or need. With an older car, you can probably eliminate comprehensive coverage and only carry liability (a minimum amount of liability insurance coverage is required in all states). For a luxury make, you’ll more likely want comprehensive or full coverage from a more upscale insurer.
  2. Know what you can spend – Calculate your monthly budget to determine what you can spend on car insurance. This is especially important if you are buying up, a new vehicle that costs more to insure than your current one. It makes no sense to buy a sports car or luxury SUV if you can’t afford the monthly insurance premiums.
  3. Decide on your deductible – You can get a premium price break if you opt for a higher deductible – the amount you pay out-of-pocket for covered losses before your insurance kicks in. There are deductibles in amounts ranging from $250 to $1,500. Remember, however, that you won’t be able to repair your vehicle if you don’t have the deductible readily available to you. That $1,500 deductible may sound really good, but if you don’t have it in the bank and you suddenly need it, maybe it isn’t such a wise idea after all.
  4. Check your credit report – Insurers base premiums and coverage on many factors, including your credit worthiness. Know what your credit report contains and get a copy of your credit score. Good credit worthiness equals better rates – if other factors are also in alignment.
  5. Maintain a good driving record – This goes without saying, but it does bear repeating. Accidents, tickets for speeding, DUI, etc., all take a toll on your insurance premium. And they stay on your record for three years. Some insurance carriers ask whether you’ve had any of these in the past five years. A good driving record also helps you qualify for discounts, which lower your monthly insurance premium.
  6. Ask your friends – Find out which insurer your friends use and whether or not they’re happy with their overall service. This is a good place to start, especially if you’re not happy with your current auto insurance provider.
  7. Research – This involves a bit of legwork on your part, but the results will be well worth it. Compare rates of numerous auto insurance providers through sites such as www.netquote.com/ and www.insweb.com/. Next, check consumer complaint ratings through your state’s department of insurance website (number of complaints per 1,000 claims). Also check the companies’ consumer satisfaction ratings. J.D. Power and Associates (www.jdpa.com) conducts an annual survey of the major auto insurance companies. For the past three years, Amica and Erie have scored at the top of the list in all categories. You’ll want to research the financial strength of the companies by checking their A.M. Best (www.ambest.com) and Standard and Poors’ (www.standardandpoors.com) ratings. A good site with lots of tips on buying car insurance is Edmunds (www.edmunds.com).
  8. Compare services –Check each company you’re considering to see how they handle billing and payment, policy renewals, and claims process. Most have a toll-free number. Use it and ask lots of questions. The way you’re treated and how they answer your questions will be a good barometer of the company’s overall customer service.
  9. Decide how you’ll interact – Do you prefer to work with a local agent, an independent agent representing several companies, or directly with the auto insurance provider? You can buy online, over the phone, or in person through an agent.
  10. Get all your available discounts – While you’re interacting with your short list of insurance providers, make sure to inquire about all available discounts – non-smoker, anti-theft devices, good driver discount, senior discount, special membership discount, etc. If you do stay with your current insurer, make sure you get persistent customer discount as well.

By Suzanne Kane

For more tips on car insurance, visit our section on car insurance where you can get additional tips and insurance quotes.

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